Finance and Accounting
Product Cost Accounting
Finance must deliver timely, accurate decisions regarding product mix, pricing, marketing promotions, sourcing, and product launches to maintain customer loyalty and expand market share. Genpact's product cost accounting solutions provide end-to-end oversight of the entire supply chain, from Bill of Material (BoM) setup, updates, and reviews to forecasting and budgeting, factory accounting and reconciliation, and reporting. Our Intelligent OperationsSM approach has made us the partner of choice in product and supply chain accounting for Fortune 500 companies around the world.
Our product cost accounting solutions are part of Genpact's System of EngagementTM for Record to Report (R2R), an agile solutions layer that integrates with and complements clients' existing systems of records. This enables us to design, transform, and run highly intelligent, advanced operating models for supply chain accounting and product costing that leverage our Smart Enterprise Processes (SEPSM) framework of smarter processes, analytics, and technologies.
Genpact uses a variety of agile, bolt-on tools for product cost accounting to help our clients reduce volatility and control costs. These include proprietary tools for examining BoMs, rates of operations cost variances, and journal entries; web-based e-learning modules; preventive controls; and expert audits. Pre-defined efficiency and effectiveness metrics hone processes, boost performance, and provide deep insight into product cost structures.
Our end-to-end product costing spans:
- BoM/Material master management: Setup, update, validation, and review
- Forecasting, budgeting, and standard product costing: Demand forecasting, annual budget creation and updates, transfer pricing computation, ERP allocation rule updates, computation and updating of standard costs for existing and new products
- Factory accounting, period close, and reconciliation: Moving average price reviews, accruals booking for all manufacturing centers, review settlement of work orders, execution cost allocation cycles, cost of manufacturing accrual reconciliation, inventory reconciliation, and booking of period close journals
- Reporting and analysis: Inventory analysis (slow-moving, aging, obsolete, and cycle count) and cost analysis (standard vs. actual, change in standard costs, rate of operation analysis)
Genpact's product cost accounting solutions focus on delivering impact by linking key process drivers to desired business outcomes. The results are measurable and lasting:
Millions of revaluation and working capital impact from implementing a comprehensive BoM tool
A global manufacturer of tissue, personal care, and health care products needed to correct variances in inventory valuation to update standard BoMs and Rates of Operation based on actual cost trends. Genpact compared the inventory value of 170,000 materials with actual inventory at 50 mills, analyzing expense lines, base material costs, packing materials, utilities, and labor costs.
Over a million dollars savings through inventory analysis within three months
A global equipment manufacturer had no effective review and reporting mechanism for open purchase orders (POs) against slow-moving items. This resulted in a large number of open POs for a growing stock of inventory that was at risk of obsolescence. Genpact conducted a one-time cleanup of open items and created a review and reporting mechanism for future purchases to prevent recurrence of the problem. By cancelling or postponing open orders for slow-moving inventory, the company saved over $1 million within three months.